House prices....

saverbuyer

Mistral001 wrote: »

Apology accepted!!

Pet hate when people say that on this forum.

opinions are welcome as far as I am concerned. Afterall it was only my opinion.

Lol. Never thought of it that way. You're quite right too.

saverbuyer

A.L.D.A wrote: »

You say that with such certainty.

This is a crises that could have been avoided. You mention Germany, but in truth no matter what way this turns Germany has to take a loss. If Italy or Spain default German and French Banks take a hammering and many will fail. If the ECB prints and buys bonds the currency is weakened. If it is direct intervention the German tax payer pays. Several of the aforementioned will increase the cost of German borrowing. If Germany opts out the new mark will rise and they will be in the same position as Switzerland with a currency value that cripples their industry and businesses will increasingly move production. If Italy opts out then the likelihood of getting back loans is low.

Germany does not have many good options. I think they will try significant ECB intervention. Should have done this back when Ireland hit the buffers.

2013 is the next German general election and the current government will lose. Will they try something radical, I very much doubt it.

This is a crisis that could have been avoided how ALDA, without the 20 year debt splurge. These countries have been BORROWING for growth for years. That can't be change overnight.

Can you understand that? These economies would not have recorded any growth if it had not been for massive amounts of debt. The markets have twigged on that debt servicing only works in an unlimited growth model and the only way to grow, ad infinitum is with more and more debt.

You need to look at the official GBP to debt figures, the public borrowing figures etc and then add some because, it's argued to gain Euro entry most just made them up.

A.L.D.A

SaverBuyer

We were referring to the current impasse in the Euro Zone, dithering is the difference between the UK and them. America and the UK have also been funding growth by borrowing. We know all that. Comment on the past is as easy as predicting yesterdays weather.

Question now is what is the way forward for each country? As I said whatever way it turns Germany faces a loss. I think they will agree to much greater intervention by the ECB first and after that who knows?

Western currency values are all over valued.

If they go down we go with them, and I doubt if that will be to the advantage of FTBs or anyone else. Many people could lose their jobs, savings and pensions could be wiped out etc. If Italy or Spain defaults the world banking system will be hammered. Trade will be severely impaired. Few gain from this so you will see concerted attempts to improve 'liquidity'. At best that could lead to a period of high inflation ahead. If it does not work then questions like can the UK feed its population come into play!

Should have let the Banks collapse in the first place IMO, but we are where we are.

Here is another question. In a collapse what is of greatest benefit, money or assets?

saverbuyer

A.L.D.A wrote: »

SaverBuyer

We were referring to the current impasse in the Euro Zone, dithering is the difference between the UK and them. America and the UK have also been funding growth by borrowing. We know all that. Comment on the past is as easy as predicting yesterdays weather.

Question now is what is the way forward for each country? As I said whatever way it turns Germany faces a loss. I think they will agree to much greater intervention by the ECB first and after that who knows?

Western currency values are all over valued.

If they go down we go with them, and I doubt if that will be to the advantage of FTBs or anyone else. Many people could lose their jobs, savings and pensions could be wiped out etc. If Italy or Spain defaults the world banking system will be hammered. Trade will be severely impaired. Few gain from this so you will see concerted attempts to improve 'liquidity'. At best that could lead to a period of high inflation ahead. If it does not work then questions like can the UK feed its population come into play!

Should have let the Banks collapse in the first place IMO, but we are where we are.

Here is another question. In a collapse what is of greatest benefit, money or assets?

I think you need to take a look at the growth figures for Iceland and Argentina. Near 10% if I'm not mistaken and both recent defaulting nations.

On the assets or cash question, I know some (me included to a smaller extent) are fans of the shiny stuff. Housing as a asset class really isn't a good choice. They are immobile and easily taxed. The yield (usually) depends on continued government support in the form of HB. Not a good idea in the current climate.

A.L.D.A

saverbuyer wrote: »

I think you need to take a look at the growth figures for Iceland and Argentina. Near 10% if I'm not mistaken and both recent defaulting nations.

On the assets or cash question, I know some (me included to a smaller extent) are fans of the shiny stuff. Housing as a asset class really isn't a good choice. They are immobile and easily taxed. The yield (usually) depends on continued government support in the form of HB. Not a good idea in the current climate.

I am trying to guess what they will do, not what I would do.

They seem hell bent on trying to prop up the unsupportable. So QE is what they will try, again and again, coupled with attempts to control government spending.

I would have had no hesitation following the Icelandic lead, Ireland should have. I would have let the banks fail without even a second thought.

Right now default is the best option for many countries. The debts will never be repaid and the sooner we come to terms with that the better. I didn't run up the losses of any Bank so why should I pay for them?

Precious metals are a safe haven, I would prefer silver to gold, but in a general sense I prefer something that earns some money rather than relying on appreciation in value. Money in Bank Accounts are a really bad option if all goes pear shaped.

Apparently the Swiss are considering NEGATIVE INTEREST RATES :eek: Now I am not a great fan of interest as in many ways it is the root of many problems, but negative!!

If things do collapse hard to beat a few acres of vegetables and some chickens! A lot of what we take for granted will become scarce. Must re-read 'when money dies'.

qwert_yuiop

saverbuyer wrote: »

I'm sorry Mistral but Italy is toast, Spain is toast, the Euro as a project is finished. There will be no bail out for the "smaller" countries because Spain and Italy anything but small. There are Political problems also, Merkel won't be able to sell it to the German people too much longer that they have to pay for the rest.

Seriously give it 24 months, the Euro as you, me, Ireland, Spain and Ital knows it is over.

I'd been wondering how the Unfree State (check this morning's Irish Independent) could get out of the euro without a capital flight from Irish banks, leading to their collapse (again). It's actually quite simple to avoid a bank run - just close the banks down until it's all completed. Then you find your account denominated in An Phunt Nua when they re-open.

Sorted. Sort of.

A.L.D.A

qwert_yuiop wrote: »

I'd been wondering how the Unfree State (check this morning's Irish Independent) could get out of the euro without a capital flight from Irish banks, leading to their collapse (again). It's actually quite simple to avoid a bank run - just close the banks down until it's all completed. Then you find your account denominated in An Phunt Nua when they re-open.

Sorted. Sort of.

How to get out, you tell everyone you are not going to do it, and over a public holiday (Merry Chrictmas and a happy New Year by the way) you change your mind and introduce the new punt (Mark or whatever). You make it equal to the Euro and then let it rise and fall. So all accounts are transferred from one currency to another. That bit is the easy part.

Now problem is if you have a weak economy and your new currency drops in value, but your liabilities are in Euro then you have just increased the difficulty of repayment. So I think default would probably go hand in hand with such a strategy.

Of course it is a lot easier (in the short term) if your new currency is likely to be strong and appreciate in value against the Euro, but in the long term that may cripple your ability to export.

With Eurozone politicians anything is possible. Their ability to make a bad situation worse knows no bounds. However their general form seems to be to dither so the likelihood of decisive action by any of them is reduced. This lot are not risk takers. However If I had an account in any of the PIGS, including Sterling accounts I would shift my money just in case. Why take any risk?

qwert_yuiop

A.L.D.A wrote: »

Now problem is if you have a weak economy and your new currency drops in value, but your liabilities are in Euro then you have just increased the difficulty of repayment. So I think default would probably go hand in hand with such a strategy.

This would be the primary justification for leaving the euro.

tara747

So, house prices...?

qwert_yuiop

qwert_yuiop wrote: »

'Cause they know what it's worth, and they're not settling for a penny less. Meanwhile the house is gently rotting away, the garage door is hanging off and someone's broken a window. Just sell the brute, lads.

Rates bill? £1340 if it's the same as mine. Would that not concentrate your mind?

Sale agreed! Someone's been reading the forum - congrats., lads.